This invention relates to a system and a method for processing signature-based payment transactions and more particularly relates to such a system and method in which a merchant's records of payment may be generated and maintained electronically without generation or use of paper records except those delivered to customers at the point of sale.
In retailing and similar areas, the volume of transactions is often such that management of paper records is burdensome. Therefore paper records are being replaced by digital storage media wherever feasible. However, digital storage devices have not been able to eliminate the need for paper storage in many financial transactions requiring consumer approval. Typical examples are transactions involving account debit (including check) and charge receipts. In such transactions paper documentation bearing a human signature has continued to be the norm. The storage and retrieval of such records is both inefficient and costly.
While techniques have been developed for producing digitized facsimiles of human signatures and processing such digitized facsimiles to verify the authenticity thereof, there has been no practical means of correlating a digitized signature with a specific transaction. Only by preserving a record of the transaction with the original copy of the approving signature thereon has it been possible to satisfy the commercial need for proof of an obligation. Thus paper records have persisted in the face of strong incentives for their elimination.
It is therefore seen that there is a need for a practical method and system for capturing an image of a signature in digital form and combining it with a digital record of the transaction itself. There is a further need for such a system which includes an effective defense against attempted fraud. In particular, there is a need for a mechanism for assuring that a signature purportedly approving a commercial obligation was captured at the time of a questioned transaction and is not a genuine signature obtained on some other occasion and fraudulently merged into the digital record of the transaction.